Veremu Pty Ltd & Ors v Ezishop.Net Ltd & Ors [2003] NSWCA 317
The agreement to subscribe for shares contemplated and allocated the risk of failure of the business and possible liquidation; insolvency and liquidation were within the parties’ contemplation at the time of contracting, so there was no frustration. The appellants’ obligation to pay the subscription moneys remained enforceable, as the essential state of affairs — the issue of shares — was still capable of performance.
- Jurisdiction
- Australia
- Judgment Date
- 10 November 2003
- Procedural Posture
- Appeal / Judgment
- Outcome
- Appeal dismissed with costs.
- Legal Topics
- ['frustration of Contract' 'share Subscription Agreements' 'liquidation and Insolvency' 'venture Capital Funding']
Case Brief
Summary, issues, holding and outcome
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Procedural Posture
Appeal / Judgment
Legal Issues
- 1 ['Whether the share subscription agreement was frustrated by the insolvency and liquidation of Ezishop.Net Ltd' 'Whether the obligations to subscribe for shares and guarantee payment survived liquidation' 'Whether there was a total failure of consideration relieving appellants of payment obligations']
Ratio Decidendi
The agreement to subscribe for shares contemplated and allocated the risk of failure of the business and possible liquidation; insolvency and liquidation were within the parties’ contemplation at the time of contracting, so there was no frustration. The appellants’ obligation to pay the subscription moneys remained enforceable, as the essential state of affairs — the issue of shares — was still capable of performance.
Court Disposition
Appeal dismissed with costs.
Orders
- ['Appeal dismissed with costs.']
Full Case Text
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